Tuesday, the Justice Department filed charges against John Barksdale, an executive behind Ormeus Coin after allegedly misrepresenting the value of the coin’s mining assets.
It is alleged that investors were erroneously told that the coin was backed by a mining operation which delivered $5 million in monthly revenue. The Barksdales raised over $120 million from more than 20,000 investors over the past five years. Charged with securities fraud, wire fraud, and conspiracy, he faces up to 65 years in prison.
“The country has been doing much better, over the past few years, with tracking down bad actors and charging them. Now, it is time to move forward with preventative actions. Hopefully, the new executive order will inspire agencies and the industry to come together and create a commonsense set of regulatory guidelines that protect investors while allowing innovation to continue to thrive,” said Richard Gardner, CEO of Modulus, a US-based developer of ultra-high-performance trading and surveillance technology that powers global equities, derivatives, and digital asset exchanges.
Barksdale, with his sister as an accomplice, “acted as modern-day snake-oil salesmen” said Melissa Hodgman, Associate Director of the SEC Enforcement Division.
“Bad actors deserve to face punishment which is appropriate for the crime. Notably, the Barksdales are facing significantly more punishment than the BitMEX co-founders, who were each only hit with a $10 million fine. The fraud associated with this case is terrible, and the charges are worthwhile. However, to think that the BitMEX co-founders, who purposely and knowingly avoided KYC and AML regulations, which, in effect, turned their exchange into a money laundering operation, only had to pay a fine… well, that’s curious,” said Gardner.
Modulus is known throughout the financial technology segment as a leader in the development of ultra-high frequency trading systems and blockchain technologies. Modulus has provided its exchange solution to some of the industry’s most profitable digital asset exchanges, including a well-known multi-billion-dollar cryptocurrency exchange. Over the past twenty years, the company has built technology for the world’s most notable institutions, with a client list which includes NASA, NASDAQ, Goldman Sachs, Merrill Lynch, JP Morgan Chase, Bank of America, Barclays, Siemens, Shell, Yahoo!, Microsoft, Cornell University, and the University of Chicago.
“Money laundering is extremely serious because it could provide funding to terrorists, drug cartels, and other nefarious enterprises. Politicians talk about the great threat of money laundering. However, our actions must match our words. In such a situation, a small fine is simply not good enough. Society deserves better,” said Gardner.
